A strong international demand for bonds from Canada's biggest banks is trickling through the system and pushing mortgage rates to record lows at the consumer level.
The Bank of Montreal was the first bank to
offer a five-year fixed mortgage rate to 2.99% last Thursday. This is the
lowest posted rate from a major bank in Canadian history.
TD followed suit by lowering their four-year fixed rate to 2.99 per cent on Friday afternoon.
BMO's offer, which ends Jan. 25, and it
carries many restrictions. For example, lump sum payments are limited to 10 per
cent of the principal each year. The mortgage is also based on a 25-year
amortization period. TD's offer is open until Feb. 29, 2012. It's also for a
four-year term, much less common than the standard five-year.
The lower mortgage rates are
the results of a broader trend in which international bond investors are
gobbling up Canadian offerings at record levels because they're generally
perceived as being safer than bonds from other countries..
Low rates
may be around for some time, but it is critically important for homeowners to
look beyond the mortgage rate and review the conditions and restrictions of
these special products.
Shopping for
a mortgage can be confusing, the product features vary significantly. If you
wish to re-finance, or you want to move and take advantage of these low rates,
contact me.
I can refer
you to a mortgage specialist that can explain the products and help you choose
the right mortgage product.
Randy Miller
Sales
RepresentativeReMax Rouge River Realty Ltd., Brokerage in Whitby
905-668-1800 or 905-427-1400
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